Google Confirms FTC Review, Will Cooperate

Google said it received notice of a formal inquiry into its search practices, a prelude to a possible broad antitrust lawsuit to determine whether the search engine is impeding the industry.

Google (NASDAQ:GOOG) June 24 said it has received a notice that the
U.S. Federal Trade Commission has formally launched an investigation of the
company's search business.

Google Fellow Amit Singhal said the company, which holds
65 percent search share in the United States and 90 percent-plus in many other
countries, received the notice and will work with the FTC just as it
has in the past to answer questions.

"It's still unclear exactly what the FTC's concerns
are, but we're clear about where we stand," Singhal wrote in a blog post. "Since the beginning, we have been guided by the idea that, if
we focus on the user, all else will follow."
Google's search business has come under considerable
scrutiny in the last several months, starting in Europe.
The European Commission launched an investigation into the company's search practices after vertical
search engines such as Foundem, eJustice.fr and Microsoft's (NASDAQ:MSFT) Ciao complained the
company favored its own Web services in search results on Google.com over
theirs. They argued that this put them at a significant competitive
disadvantage in the market.
Google faces similar accusation in the United States from Texas
State Attorney General Gregg Abbott, who asked for reams of info on Google's ad pricing, shopping search and the ranking
of Websites in search results and ad listings.
News of a formal FTC inquiry has been brewing for months,
though the Wall Street Journal correctly foreshadowed the formal inquiry.
The FTC has decided to press forward after hearing
complaints from Microsoft, Expedia (NASDAQ:EXPE), TripAdvisor, Yelp and others
that Google promotes its own Web services above their own.
Google has denied all allegations, noting that its search
algorithms analyze Website quality and popularity based on links for placement
as part of its PageRank system. The company is fond of telling anyone who
mentions the "monopoly" word in the same breath as "Google"
that the competition is just a click away.
While Singhal did not repeat that mantra in his post, he
argued Google's goal is to put the user first by delivering results that
are as relevant and with great speed and efficiency. For example, the company
introduced Google Instant predictive search technology last year and is
advancing this technology set to include Web pages and images this summer.
Singhal also noted that Google makes sure to distinguish
ads from search results, and share information about its ad practices with
advertisers and how its search technology works with those who want to learn
more about it.
The company also created a Data Liberation front in 2009
to ensure users control their own data. This is accompanied by a Google
Dashboard, which lists data users create with Google's Web services.
Despite all of this, FairSearch.org, formed by Expedia and
other online travel companies committed to stop Google from acquiring ITA
Sofware last year, cheered the idea that the FTC is launching a broad antitrust
investigation into Google's business practices.
"Google engages in anti-competitive behavior across
many vertical categories of search that harms consumers by restricting the
ability of other companies to compete to put the best products and services in
front of Internet users, who should be allowed to pick winners and losers
online, not Google," FairSearch said in a statement.
As FairSearch.org suggests, the FTC's argument might be
that Google limits consumer choice by hiding vertical search rivals lower in
its results. This burden of proof could prove quite difficult.